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After zero interest rates by the fed what's next. Could we actually see NEGATIVE interest rates where you actually pay the US to keep your money. Is this going to be the next step. Sounds far fetched but let's not completely rule this scenario out
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outsourci...@yahoo.com
Apr 18, 2020, 6:44:09 PM4/18/20
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In today's mad world anything is possible. Since there is souch overleveraging on US TREASURY BONDS it seems even zero interest rates might not curb the appetite for these bonds. There seems to be so much money outside the US with various groups ( not all who might be legitimate) who simply want a safe haven for their money. For them it might even make sense to
Pay a certain amount each year to keep
Their money safe. The fed could start with something small like -0.1%. And then raise it to -0.25%. We could even conceivably see -0.50 % and possibly even - 1% in the years to come. This will ensure that the bull Market for bonds continues.
Of course we could always revert to conventional
wisdom and get back to regular interest rates in the years to come. Since anything positive is only upwards from here (we are at zero interest rates on 30 year US TREASURY BONDS) we could now see a reversal of the bull market as interest rates gradually rise. I feel that once interest rates for US TREASURY BONDS go back upto about 2% things will Actually be a lot better for the US in the long run. WE will actually get a more stable financial system as interest rates climb back upto normal normals. Maybe even seeing 2.5 to 3% on US TREASURY BONDS ONE DAY. But certainly around 2%!to bring back some balance and stability in the US financial system.
However it will be interesting to see if at least for the short term ( maybe even for the medium term ) we actually see negative interest rates. Could it happen. Theoretically yes. Practically no but than one never knows sincevthe demand for US TREASURY BONDS IS SO HIGH and there is so much overleveraging on US TREASURY BONDS all over the world that this unlikely scenario may occur.
Pay a certain amount each year to keep
Their money safe. The fed could start with something small like -0.1%. And then raise it to -0.25%. We could even conceivably see -0.50 % and possibly even - 1% in the years to come. This will ensure that the bull Market for bonds continues.
Of course we could always revert to conventional
wisdom and get back to regular interest rates in the years to come. Since anything positive is only upwards from here (we are at zero interest rates on 30 year US TREASURY BONDS) we could now see a reversal of the bull market as interest rates gradually rise. I feel that once interest rates for US TREASURY BONDS go back upto about 2% things will Actually be a lot better for the US in the long run. WE will actually get a more stable financial system as interest rates climb back upto normal normals. Maybe even seeing 2.5 to 3% on US TREASURY BONDS ONE DAY. But certainly around 2%!to bring back some balance and stability in the US financial system.
However it will be interesting to see if at least for the short term ( maybe even for the medium term ) we actually see negative interest rates. Could it happen. Theoretically yes. Practically no but than one never knows sincevthe demand for US TREASURY BONDS IS SO HIGH and there is so much overleveraging on US TREASURY BONDS all over the world that this unlikely scenario may occur.
outsourci...@yahoo.com
Apr 19, 2020, 1:33:54 AM4/19/20
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Currently the yield on US TREASURIES IS about 1.3% for 30 year bonds. This means the zero interest bonds are already selling at a discount. Someone is still buying them even though there's a discount. Now at first putting
A negative interest rate on new bonds might take the yield lower ( depending on the negative interest). So -0.25% on new US TREASURY BONDS could see the yield come down to 1%. But than we could see it rise back a bit as well meaning prices which will further rise might than dip again. It will be interesting to see what the prices are. There is a massive demand for US TREASURIES WVEN AT ZERO INTEREST. Will we conceivably see demand even at negative interest rates or will bond prices crash giving us a yield around 1.25% to maybe even higher at 1.35 to 1.4% and maybe even 1.5% upwards signaling that the demand for US TREASURIES IS FINALLY WEAKENING due to zero interest rates and than due to negative interest rates. It will be interesting to see where the yields are about 6 months to a year from now if zero interest rates continue.
A negative interest rate on new bonds might take the yield lower ( depending on the negative interest). So -0.25% on new US TREASURY BONDS could see the yield come down to 1%. But than we could see it rise back a bit as well meaning prices which will further rise might than dip again. It will be interesting to see what the prices are. There is a massive demand for US TREASURIES WVEN AT ZERO INTEREST. Will we conceivably see demand even at negative interest rates or will bond prices crash giving us a yield around 1.25% to maybe even higher at 1.35 to 1.4% and maybe even 1.5% upwards signaling that the demand for US TREASURIES IS FINALLY WEAKENING due to zero interest rates and than due to negative interest rates. It will be interesting to see where the yields are about 6 months to a year from now if zero interest rates continue.
outsourci...@yahoo.com
Apr 22, 2020, 4:05:53 AM4/22/20
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I posted this on April 19th and can you believe it just a day later on April 20 th we saw NEGATIVE PRICES ON OIL.
No one thought this would be possible and I once again say that negative interest rates by the Fed could become reality. As I mentioned on April
19th 2020 about negative rates being theoretically possible and being proved right in my prophetic prediction a day later albeit on oil
Prices with prices as high as NEGATIVE thirty nine dollars a barrel being quoted it is conceivable that even for a short period of a few months we could conceivably see negative interest rates. Maybe only -0.1% to -0.25% but it is possible. Maybe even upto -0.5% and at most -1%. But even something very minor like -0.1% would be historic.
Of course if we revert to a more normal situation and see a gradual rise in interest rates than the bond bull market is truly over.
However we could at least see zero interest rates for a long time even if the fed doesn't raise them. And so the yield of a 30 year treasury bond currently at about 1.2% could slowly drop below 1% and one day maybe even drop below 0.25%
And so if the demand for US TREASURY BONDS CONTINUES WE COULD SEE THE YIELDS OF US TREASURY BONDS GO INTO NEGATIVE TERRITORY. This is very realistic and may happen if zero interest rates continue for a long time but the demand for US TREASURIES remains high.
So a scenario of zero interest rates if it continues for a long time could conceivably see yields drop
Lower and lower and maybe one day even dipping into negative territory signaling that the bull market for US BONDS remains strong.
Anything is possible in today's scenario.
No one thought this would be possible and I once again say that negative interest rates by the Fed could become reality. As I mentioned on April
19th 2020 about negative rates being theoretically possible and being proved right in my prophetic prediction a day later albeit on oil
Prices with prices as high as NEGATIVE thirty nine dollars a barrel being quoted it is conceivable that even for a short period of a few months we could conceivably see negative interest rates. Maybe only -0.1% to -0.25% but it is possible. Maybe even upto -0.5% and at most -1%. But even something very minor like -0.1% would be historic.
Of course if we revert to a more normal situation and see a gradual rise in interest rates than the bond bull market is truly over.
However we could at least see zero interest rates for a long time even if the fed doesn't raise them. And so the yield of a 30 year treasury bond currently at about 1.2% could slowly drop below 1% and one day maybe even drop below 0.25%
And so if the demand for US TREASURY BONDS CONTINUES WE COULD SEE THE YIELDS OF US TREASURY BONDS GO INTO NEGATIVE TERRITORY. This is very realistic and may happen if zero interest rates continue for a long time but the demand for US TREASURIES remains high.
So a scenario of zero interest rates if it continues for a long time could conceivably see yields drop
Lower and lower and maybe one day even dipping into negative territory signaling that the bull market for US BONDS remains strong.
Anything is possible in today's scenario.
outsourci...@yahoo.com
Apr 22, 2020, 4:28:52 AM4/22/20
to
Another interesting scenario is why would the fed even consider raising interest rates when there might still be a huge demand for US TREASURIES even at zero interest rates. Therefore as of now even at zero interest rates on 30 YEAR US TREASURY BONDS we are seeing a big demand for US TREASURY BONDS. The yields are about 1.2%. These yields may continue to drop telling us that the demand for US TREASURY BONDS REMAINS HIGH. And even if zero interest rates continue by the fed this yield may even go below 1% and one day below even 0.75%. This will
Keep signaling that the bull market for US TREASURY BONDS is still high. We could see yields dropping to 0.5% and then even going below 0.25%. It is conceivable for the yields to go to even zero and one day into NEGATIVE TERRITORY. This will keep reaffirming that the bull market for 30 year US treasury bonds is still
Alive and well even at zero interest rates by the fed.
We could theoretically see -0.1% yields and then -0.25% yields and maybe even -0.5% yields and conceivably even -1% yields or possibly even higher on zero interest 30 YEAR US TREASURY BONDS. This bull market will continue even with negative yields till the day the world realizes it's not worth it.
AS LONG AS THE WORLDS FAITH IN THE US GOVT AND WAY OF LIFE CONTINUES. THE WORLDS FAITH IN THE US SYSTEM OF GOVERNANCE, IN ITS DEMOCRACY, IN ITS PEOPLE, IN ITS SYSTEM OF JUSTICE. TILL ALL OF THIS EXISTS WE MAY CONTINUE TO SEE THE HIGH DEMAND FOR US TREASURY BONDS EVEN AT ZERO INTEREST RATES.
Keep signaling that the bull market for US TREASURY BONDS is still high. We could see yields dropping to 0.5% and then even going below 0.25%. It is conceivable for the yields to go to even zero and one day into NEGATIVE TERRITORY. This will keep reaffirming that the bull market for 30 year US treasury bonds is still
Alive and well even at zero interest rates by the fed.
We could theoretically see -0.1% yields and then -0.25% yields and maybe even -0.5% yields and conceivably even -1% yields or possibly even higher on zero interest 30 YEAR US TREASURY BONDS. This bull market will continue even with negative yields till the day the world realizes it's not worth it.
AS LONG AS THE WORLDS FAITH IN THE US GOVT AND WAY OF LIFE CONTINUES. THE WORLDS FAITH IN THE US SYSTEM OF GOVERNANCE, IN ITS DEMOCRACY, IN ITS PEOPLE, IN ITS SYSTEM OF JUSTICE. TILL ALL OF THIS EXISTS WE MAY CONTINUE TO SEE THE HIGH DEMAND FOR US TREASURY BONDS EVEN AT ZERO INTEREST RATES.
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